About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

REDMOND, Wash. (AP) — Microsoft said Wednesday that its revenue for the October-December quarter was $81.3 billion, up 17% from the same time last year as it furthers its goal to expand global adoption of its artificial intelligence tools. The company reported net profit for the quarter of $30.9 billion, or $4.14 per share, beating Wall Street expectations. Those results excluded the impact from Microsoft's investments in ChatGPT maker OpenAI. Microsoft was expected to earn $3.91 per share on revenue of ...

The company reported strong growth in Azure cloud-computing segment and an earnings-per-share boost from OpenAI deal ...

Revenue Growth - Microsoft Cloud revenue increased 26% to $51.5 billion[141] - Microsoft 365 Commercial cloud revenue increased 17%[141] - Azure and other cloud services revenue increased 39%[141] - LinkedIn revenue increased 11%[141] - Productivity and Business Processes revenue increased by $4.7 billion or 16%, with Microsoft 365 Commercial products and cloud services revenue growing by $3.4 billion or 16%[178] - Intelligent Cloud revenue increased by $7.4 billion or 29%, with operating income rising by $3.0 billion or 28%[182][183] - Revenue for the three months ended December 31, 2025, was $81,273 million, an increase of 17% compared to $69,632 million for the same period in 2024[161] - Total revenue for the six months ended December 31, 2025, increased by $23.7 billion or 18% compared to the prior year[177] Net Income and Earnings - Net income for the three months ended December 31, 2025, was $38.5 billion, a 60% increase compared to the prior year[161] - Current year net income increased by $4.5 billion or $0.60 in diluted EPS, positively impacted by net gains from investments in OpenAI[175] - Adjusted net income (non-GAAP) for the three months ended December 31, 2025, was $30.875 billion, reflecting a 23% increase from $25.047 billion in 2024[224] - Adjusted net income for the six months ended December 31, 2025, was $61.7 billion, a 23% increase from $50.2 billion in 2024[224] Operating Income and Expenses - Operating income for the three months ended December 31, 2025, increased 21% to $38.3 billion[161] - Operating expenses increased by $1.6 billion or 5% driven by R&D investments in AI talent[171] - Operating expenses increased by $809 million or 6%, reflecting higher research and development investments and advertising expenses[202] - General and administrative expenses increased by $109 million or 6% for the three months ended December 31, 2025, driven by higher legal expenses[208] - For the six months ended December 31, 2025, general and administrative expenses rose by $242 million or 7%, also due to higher legal expenses[209] Cash Flow and Investments - Cash from operations increased by $24.3 billion to $80.8 billion for the six months ended December 31, 2025, primarily due to increased cash received from customers[230] - Cash used in investing activities rose by $28.0 billion to $57.3 billion for the six months ended December 31, 2025, driven by significant increases in property and equipment additions[230] - Cash used in financing increased by $1.6 billion to $29.4 billion for the six months ended December 31, 2025, primarily due to a $4.0 billion increase in common stock repurchases[230] Tax and Other Income - The effective tax rate increased to 20% for both the three and six months ended December 31, 2025, compared to 18% in the same periods of 2024, primarily due to deferred tax expenses[218] - Other income (expense), net totaled $9.971 billion for the three months ended December 31, 2025, compared to a loss of $2.288 billion in the same period of 2024, marking a 536% increase[224] - Interest and dividends income increased to $840 million for the three months ended December 31, 2025, up from $600 million in 2024, primarily due to higher portfolio balances and yields[215] Cloud and AI Investments - Microsoft Cloud gross margin percentage decreased to 67% due to investments in AI infrastructure[172] - Investments in cloud offerings and AI infrastructure will continue to increase operating costs[146] - A long-term strategic partnership with OpenAI was extended to advance artificial intelligence[144] Future Projections - Total unearned revenue expected to be recognized by December 31, 2026, is $54.044 billion[234] - The expected future recognition of unearned revenue totals $54.0 billion as of December 31, 2025, with $26.3 billion expected in the three months ending March 31, 2026[234] - The company expects existing cash and cash flows to be sufficient to fund operating activities and cash commitments for at least the next 12 months[226]

Financial Performance - Net income on a GAAP basis was $38.5 billion, reflecting a 60% increase year-over-year, while non-GAAP net income was $30.9 billion, up 23% [3] - Diluted earnings per share on a GAAP basis was $5.16, a 60% increase, and $4.14 on a non-GAAP basis, up 24% [3] - Total revenue for Q2 2025 reached $81.273 billion, a 16.8% increase from $69.632 billion in Q2 2024 [25] - Net income for Q2 2025 was $38.458 billion, up 59.7% from $24.108 billion in Q2 2024 [27] - Earnings per share (EPS) for Q2 2025 increased to $5.18, compared to $3.24 in Q2 2024, representing a 60.2% growth [25] - Operating income for the first half of 2025 was $76.236 billion, a 22.6% increase from $62.205 billion in the same period of 2024 [25] Revenue Growth - Microsoft Cloud revenue reached $51.5 billion, a 26% increase year-over-year (24% in constant currency) [3] - Revenue in the Intelligent Cloud segment was $32.9 billion, a 29% increase (28% in constant currency) [5] - Azure and other cloud services revenue increased by 39% (38% in constant currency) [5] - Microsoft 365 Commercial cloud revenue grew by 17% (14% in constant currency) and Consumer cloud revenue increased by 29% (27% in constant currency) [4] - The Productivity and Business Processes segment generated $34.116 billion in revenue for Q2 2025, a 15.7% increase from $29.437 billion in Q2 2024 [33] - The Intelligent Cloud segment reported revenue of $32.907 billion for Q2 2025, up 28.9% from $25.544 billion in Q2 2024 [33] - The More Personal Computing segment's revenue for Q2 2025 was $14.250 billion, a slight decrease from $14.651 billion in Q2 2024 [33] Shareholder Returns - Microsoft returned $12.7 billion to shareholders through dividends and share repurchases, a 32% increase compared to the previous year [5] Investments and Future Outlook - Investments in OpenAI impacted net income by $7.6 billion and diluted earnings per share by $1.02 in the second quarter of fiscal year 2026 [10] - The company anticipates continued growth driven by cloud and AI services, with a focus on innovation and product enhancements [6] Assets and Cash Position - Cash and cash equivalents at the end of Q2 2025 were $24.296 billion, down from $30.242 billion at the end of Q1 2025 [31] - Total assets increased to $665.302 billion as of December 31, 2025, compared to $619.003 billion as of June 30, 2025 [29] Performance Obligations - Commercial remaining performance obligation surged 110% to $625 billion [3] Research and Development - Research and development expenses for Q2 2025 were $8.504 billion, up from $7.917 billion in Q2 2024, indicating a 7.4% increase [25]

Microsoft topped quarterly revenue expectations for its crucial cloud-computing business on Wednesday, signaling that its hefty spending on artificial intelligence was paying off, easing worries about... ...

Core Viewpoint - Microsoft reported record spending on artificial intelligence in the last quarter, leading to slower cloud-computing growth, which has raised concerns among investors expecting significant returns from this investment and its partnership with OpenAI [1][2]. Financial Performance - Microsoft experienced a 6.5% decline in share price during after-market trading following the release of its fiscal second-quarter financial results [1]. - The Azure cloud division's revenue grew by 39% in the October-December period, slightly exceeding the consensus estimate of 38.8% [5]. - Overall revenue for the company increased by 17%, while the cost of revenues rose by 19%, raising concerns about potential long-term trends [4]. Strategic Partnerships and Competitive Landscape - The partnership with OpenAI, which plans to invest at least $281 billion with Microsoft, was initially viewed as a competitive advantage but is now seen as a potential drawback due to competition from Google's Gemini, which is attracting major clients like Apple [2][6]. - Microsoft holds a 27% stake in OpenAI, which has positively impacted its earnings due to changes in accounting for this stake [6]. Future Outlook - For the current fiscal third quarter, Microsoft forecasts Azure revenue growth of 37% to 38%, slightly above analyst estimates of 36.41% [8]. - The company anticipates overall sales to be in a range with a midpoint of $81.2 billion, aligning with analyst expectations of $81.19 billion [8].

Core Insights - Microsoft reported Q2 revenue of $81.27 billion, exceeding analyst expectations of $80.31 billion [1] - Intelligent Cloud revenue reached $32.91 billion, surpassing the forecast of $32.39 billion [1]

So for some more insight on just expectations into these reports and I'd like to welcome in Daniel Rabbino, editor and chief of Windows Central. Daniel, always appreciate you joining us, especially as we're on the heels of so many news catalysts for big tech as well as just the overall market, but wanted to start off your your thoughts here on Microsoft, of course, the the earnings before Apple. How crucial is AI momentum for this earnings event and really what will you be watching to gauge the real-time mo ...

Core Viewpoint - Microsoft Corporation (NASDAQ:MSFT) is highlighted as a key AI stock on Wall Street, with an Outperform rating and a price target of $600.00 ahead of its fiscal Q2 2026 earnings report [1]. Group 1: Earnings and Performance - Raymond James analyst Andrew Marok has reiterated an Outperform rating for Microsoft, indicating positive sentiment heading into the earnings report [1]. - Azure cloud services are reported to be performing strongly, driven by non-AI workloads, although AI supply remains limited [3]. - There are concerns regarding memory supply and pricing, which may delay Microsoft's target for demand/supply equilibrium [4]. Group 2: Market Sentiment - Sentiment around MSFT stock has been declining, with shares trading lower alongside other major technology companies, except for Alphabet [2]. - Despite the potential of Microsoft as an investment, some analysts believe other AI stocks may offer greater upside potential with less downside risk [5].